2014 (7) TMI 71 - AT - Central Excise

Valuation of goods - Determination of assessable value of free issue materials - Held that - value of the free issue materials were not furnished by the appellant, therefore, its value had been determined on the basis of comparable prices of other units. In our opinion, since the issue involved is of Valuation of goods and debatable, hence, needs to be addressed by the Ld. Commr. (Appeals); at this stage, the offer made by the Ld. Consultant for the appellant seems to be reasonable, keeping in view the financial hardship expressed by the Ld. Consultant. - Matter remanded back - Decided conditionally in favour of assessee.

Summary

Issues:
Application for waiver of pre-deposit of excise duty and penalty under Rule 173Q of Central Excise Rules, 1944.

Analysis:
The appellant filed an application seeking waiver of pre-deposit of excise duty amounting to Rs.24.35 Lakhs and an equal penalty under Rule 173Q of the Central Excise Rules, 1944 read with Section 11AC of the Central Excise Act, 1944. The appellant argued that the valuation of raw materials received free, broken bricks, was determined incorrectly by the Department by adopting comparable prices of other manufacturers without considering the actual prices. The Ld. Consultant stated that the Ld. Commissioner (Appeals) did not decide the issue on merit but dismissed the appeal due to default in payment of pre-deposit. The appellant offered to make a pre-deposit of Rs.4.00 Lakhs and requested a remittal of the case to the Ld. Commissioner (Appeals) for a fresh decision on the merits.

The Revenue's representative contended that the issue was not decided on merit, and the appeal was dismissed due to the failure to make the pre-deposit. The Revenue had no objection to remanding the case to the Ld. Commissioner (Appeals). After hearing both sides, the Tribunal found that the appeal could be disposed of at that stage with the consent of both parties. The Tribunal noted that the Ld. Commissioner (Appeals) did not decide the issue on merit but dismissed the appeal for default. The key issue in the case was the determination of the assessable value of free issue materials, with the Department claiming that the value was not provided by the appellant, leading to its calculation based on comparable prices of other units. The Tribunal considered the issue of valuation to be debatable and directed the appellant to deposit Rs.4.00 Lakhs within eight weeks and report compliance to the Ld. Commissioner (Appeals). Once compliance was recorded, the Ld. Commissioner (Appeals) was instructed to proceed with the matter without requiring any further deposit, ensuring a reasonable opportunity for the appellant to be heard. The appeal was allowed by way of remand, keeping all issues open for further consideration.